Wireless profits an issue in Verizon strike

Wednesday

Aug 10, 2011 at 12:01 AMSep 10, 2014 at 10:21 AM

NEW YORK - Striking Verizon landline workers say they laid the foundation for the company's booming wireless business and shouldn't be expected to give up contract benefits just because they work on a less profitable side of the business.But management

NEW YORK - Striking Verizon landline workers say they laid the foundation for the company's booming wireless business and shouldn't be expected to give up contract benefits just because they work on a less profitable side of the business.

But management says the company has to change to stay competitive and the 45,000 landline workers can't expect to be paid the way they were when the phone company was a monopoly.

"It's no secret that the wireline business has experienced a 10-year decline in our customer base and in profitability," said CEO Lowell McAdam. "... We have arrived at the point where we must make additional hard decisions to address customer needs and the overall operating costs of the business."

A union spokeswoman said the company is seeking about $20,000 a year per worker in annual givebacks.

Martin Grubb, a steward with Communications Workers of America Local 2201, which has about 1,200 members on strike, led picketing at a Verizon facility just off the Boulevard in Colonial Heights on Monday and Tuesday.

Grubb said the union didn't want to strike, especially during an economic slump, and was sorry for any inconvenience to customers. But he said workers had been forced to take a stand in an effort to hold the company to the promises it had made to them.

"Thirteen years ago, when I put in my application with Verizon, I had three other job offers," Grubb explained. "The reason I went with Verizon was the health care and benefits were better."

Now, he said, "The company is after our health care, they want to freeze our pensions, they want the ability to force unlimited overtime, the ability to transfer at will anywhere in the country."

"We're not trying to get rich, we're just trying to make a living," he added. "It was a do-or-die situation."

Tuesday was the third day of the strike. Verizon said that with managers replacing many strikers, there was only minimal impact on service. It said there may be slightly longer hold times for customer service and longer waits for repair.

However, the company also alleged a dozen acts of sabotage that affected phone, Internet and TV service in Maryland, Massachusetts, New Jersey and New York.

Union spokeswoman Candice Johnson said it was "a management tactic, rolling out the idea of sabotage." Strikers claimed two demonstrators were hit by a replacement worker's car near Buffalo.

Negotiators met face-to-face in New York on Monday, but neither management nor labor would say if there was progress. Their contracts expired at midnight Saturday.

The workers are represented by the Communications Workers of America and the International Brotherhood of Electrical Workers.

Verizon Wireless, the non-union and much more profitable division of which Verizon owns 55 percent, was not affected by the strike. But the wireless operation was a focus of contention anyway.

Verizon phone lines are disappearing at a rate of about 8 percent per year and are down to 25 million, about a quarter of the number of devices connected to its wireless network.

But Grubb said some of that decline is purely technical, as the company reclassifies the accounts of customers who add DSL Internet service or the FiOS TV service, so they're no longer counted as landline customers.

Verizon has invested heavily to keep its landline division relevant, spending more than $20 billion to replace copper phone lines with optical fiber so it can sell cable-like TV service. While the FiOS service has staved off competition from cable, it hasn't led to profits.

Paula Lopez, 60, a customer service representative on a picket line in New York, acknowledged that fewer people use landline phones but said landlines were "the stepping stones and building blocks for wireless. ... That's where they got the money to start up the wireless."

Strikers also complained that the company was squeezing them when high-level executives were making millions. The company's top five executives received a total of $130 million in salary, benefits and bonuses last year, according to Grubb.

Company spokesman Richard Young said executive pay is based on performance and was approved by stockholders. He acknowledged that the company wants to freeze workers' pensions but is willing to enhance their 401k accounts. He said management is also demanding that workers contribute to their health insurance premiums.

Young said the workers' benefits "no longer reflect today's marketplace. ... There are dozens of competitors."

Union spokeswoman Johnson said top workers earn about $77,000 a year in New York. The company puts the figure at $91,000 and said benefits average $50,000.

Young said Verizon made $3 billion in the first six months of 2011, and strikers said it was wrong to keep them from sharing in the profits, because they are the underpinnings of the profitable wireless sector.

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